[maxxfish]

This actually isn't Elise specific, so I apoligize in advance if this is off topic.

I would love to buy the Elise through my company, but...
A. I don't want to pay the higher business auto insurance
B. Don't want to send off a major IRS red flag
C. Don't know how the appreciation/writeoff would work.

But if I autocross the Elise, and it is 'sponsored' by my company (removable vinyl logos!), does it then become a legitimate advertising expense? If so, could I buy it as a personal car and have personal auto insurance, or does it all have to be through the corporation? Anyone with any experience or tax knowledge would be a great help! Max.

 

[hermanslotus]

Max,

I personally would talk to an accountant regarding this.

Best Wishes,
Mitch

 

[ivan1]

Don't know enough to advise you, but interesting that in the UK Lotus touts the elise as a great "company car":

Lotus Elise – the Taxman's Enemy

The Lightweight Car with the Lightweight Tax

The Lotus Elise as a company car:

Probably the most exciting company car available

Extremely low CO2 emissions – 177g/km

Extremely low tax burden – 17% (2002/2003)

Extremely low tax charge – £860 (22% income tax band) and £1563 (40% income tax band) per annum

Lower tax charge, than for example: Vauxhall Vectra 2.2I 16v, Mercedes C180 and Saab 9-3 2.0T

"You are a high flying executive, you have a £23,000 company car allowance. You want a fun, exciting car, that not only appeals to the dynamic you but also shows your clients that your company is successful and looks after its staff – after all, in this age, image is everything!"

From 06 April 2002, company car tax will be based upon CO2 emissions and price and not on yearly mileage. Therefore, the more polluting the car, the more tax that is paid; so a small supermini will normally have a lower tax burden than a luxury limousine.

To avoid paying too much tax, a company car driver would have to settle for a "conventional supermini" but with the Lotus Elise as a company car, all this will change:

The Lotus Elise is one of the world's greatest sportscars, having won countless awards for handling, performance and design around the world. With 0-60mph time of just 5.6-sec and top speed of 125mph, the company fleet manager would be forgiven in thinking that the Elise has high emissions and low fuel economy but it is the complete opposite! The Elise, whilst being one of the highest performing cars in the market, also has one of the lowest tax burdens for any car (and not just for a sportscar!)

With an average fuel economy of 38.1 mpg and a CO2 emissions figure of 177 g/km, the Elise slots into the 17% Company Car Tax Band (2002/2003) giving massive savings over more traditional company cars.

Ansar Ali, General Manager for UK Sales at Lotus explains why the Lotus Elise has such a low CO2 emissions figure: "It is all down to light weight. The Lotus Elise is one of the lightest cars on the market weighing in at 756kg [kerb weight] so requires a smaller, more efficient engine to produce its phenomenal performance. Being lightweight gives other benefits such as better braking (with less mass to slow down), better cornering and agility, and improved safety."

Ansar Ali continues: "Not many people realise that the Elise is such an ideal company car. We expect to receive a great deal of interest from company car drivers for whom a company car is a perk or a bonus."

 

[smura]

The car has to be used for/in the business. Meaning a delivery car, or used to visit clients. Commuting to and from your principal office does not count as business use. Typically, if not used 100% in the business you are allowed to deduct that portion of the expense used for business (measured by mileage).

You can either write off the mileage at the IRS mileage rate (currently 36 cents for the 2003 tax year) or the apportioned depreciation and expenses (based on mileage)

See IRS publication 463 which can be downloaded from the IRS website at IRS.gov. for more information.

Advertising does not count as business use.

 

[zvezdah1]

In addition to all the SMURA says,

IF you did you'd probably end up on a first name basis with your friendly neighborhood IRS agent!
Chris

 

[smoseley]

1. If you race it you'll have to get add'l insurance
2. If you race it, you'll lose your warranty

Consider those into your expenses.

 

[cantwaitforelise]

1. If you race it you'll have to get add'l insurance
2. If you race it, you'll lose your warranty

Consider those into your expenses.

Does that include autocross? I haven't tried autocross yet but want to. I hear it is safe with no real risk of wrecking the car. Would the insurance company or auto dealer even know if you are autocrossing?

 

[Randy Chase]

Depends on the insurance company. For that reason, the official stance of SCCA is that autocross is not racing, it's a timed precision driving event, more like a driving school.

P.S. I work for a corporation that covers my car expenses.

 

[Tpup]

You should speak with an accountant. In my business, I had two cars that were in my name, one leased and one financed. The company paid for both, including my insurance which was also in my name. As you said, the cost of insurance for a car in the Company name was off the charts.

I have an accountant do my corporate and personal taxes, I have no idea how it was accounted for, he did the return, I signed it...

Roy

ps. Had no IRS issues in 9 years doing that...

 

[smoseley]

For that reason, the official stance of SCCA is that autocross is not racing

I doubt the IRS would let him have it both ways. If he's not racing it in SCCA-backed events, how can he write it off as a valid advertising expense?

 

[smura]

no matter what, you can't write it off as an advertising expense. There's no such thing. The most you can hope for is a pure business expense write off or a mileage write off.

 

[chuck-03]

If you drive a lot for work, then take the mileage writeoff. If it is used purely for business you can write that off as well as insurance and any other miscellaneous expenses not including upkeep. If you drive enough, the mileage will take care of itself.

Also, I talked to the Dealership owner in St. Louis. He said that racing your elise will not void the warranty. Lotus knows these cars were built for the track. BUT they will check the computer when you bring your car in for service. If you are at fault(revs over redline, etc.) they will not fix it under warranty. Otherwise, they will take care of it.

Frank
#4 in St. Louis

 

[OneFastLotus]

.

Also, I talked to the Dealership owner in St. Louis. He said that racing your elise will not void the warranty. Lotus knows these cars were built for the track.

Frank
#4 in St. Louis

When I spoke with Clyde at Lotus USA last year IIRC he told me that the cars are NOT covered under warranty if you race them. Reason being a lot of inept ( guys with the money to buy the car and play racecar driver) Esprit owners tracked their cars, tore the HELL out of them, then expected Lotus to replace everything.

 

[zvezdah1]

Lets differentiate between racing and track days. No way would the car be covered under warranty for racing, but I suspect track days are ok.
Chris

 

[OneFastLotus]

Chris, Im not sure. The way Clyde phrased it, it made me think that even autocrossing would be a no -no. I could have mistaken how he meant it, but he kind of grimaced when I asked.

Of course since you're Mr Lucky dawg and live down there, you should ask and let us all know! I'd honestly still like to have clarification.

 

[James A]

The issue I have run into in the past, not with Lotus, was on a service agreement versus a warranty. What I mean is I have purchased an all inclusive agreement that covered everything except tires for normal maintenance. In the case of the need for accelarated maintenace due to autocross and track days the dealer cried foul, and you know what I had to agree so I held him to what would otherwise be "normal" maintenace intervals and I covered some stuff that was well outside the norm. I considered this a reasonable agreement.

 

[DCNSX]

Smura- Say you're in sales or own a company- and use the Elise-with-company-decals in your marketing, etc. - i.e. photos of the car on your business cards/website/signage/whatever.

Wouldn't you be able to deduct at least a portion of the car's payments/operating expenses, etc. as a business advertising expense? Large corporations pay megabucks to put a decal on a NASCAR racer and I'm sure they expense every penny. Just curious where that fine line is drawn.

It seems that if one can write off country club memberships and season tickets as "entertainment" expenses perhaps track events (if potential clients are present) might work as well. It's a shot in the dark, I know....

 

[DetailersParadise]

What about if you are a corporate officer and the car is part of your employment package?

Yes, I know, talk to an accountant. Since we are discussing, what are your thoughts?

 

[grudkin]

If you can swing a legit reason to deduct, might want to look into a business lease with Putnam leasing, structured with a $1 buyout at end of lease term

 

[Randy Chase]

What about if you are a corporate officer and the car is part of your employment package?

Ding!

But be careful to make sure it's legal and tidy.